Introduction

Credit Suisse Group AG (“CS”) was a systemically important bank and was listed on the SIX Swiss Exchange and the New York Stock Exchange (“NYSE” / “Wall Street”). Together with UBS Group AG (“UBS”), it shaped the Swiss financial center for years. CS’s share price fell continuously from 2012, collapsed in 2021 and never recovered. To stabilize the situation, the Ordinance on Additional Liquidity Support Loans and the Granting of Federal Default Guarantees for Liquidity Support Loans from the Swiss National Bank to Systemically Important Banks (“Emergency Ordinance”) came into force on 16 March 2023 and was amended on 19 March 2023. On March 19, 2023, the UBS takeover of CS took place as part of a merger. Many investors suffered losses and asserted claims. Two landmark decisions were recently handed down: one in Switzerland (BGer 2E_1/2024, judgment of May 23, 2025; published on September 26, 2025) and one in New York, USA (United States District Court, Southern District of New York, decision of September 30, 2025). This Insight classifies both decisions – with a view to the future.

1) What were the proceedings in Switzerland about and what was decided?

On January 8, 2024, two investors filed a state liability claim against the Swiss Confederation with the Federal Supreme Court. Between March 10 and 15, 2023, they had bought a total of 38,000 CS shares for CHF 84,788.49 (plus fees) and sold them for CHF 30,187.15 on March 20, 2023. They thus suffered a loss of over CHF 50,000 within a few days. The Federal Council was accused of (1) applying emergency law, (2) making statements contrary to the facts and (3) exerting pressure on the heads of CS and UBS. After an oral hearing, the Federal Supreme Court dismissed the claim in its entirety on May 23, 2025; the written grounds were published on September 26, 2025. The plaintiffs therefore failed, among other things, to prove damage and causality (see question 3 below), leading the Federal Supreme Court to conclude that they had no legitimate claim to state liability.

2) What are the findings of this judgment?

The delay in publication is striking. Although the ruling was handed down on May 23, 2025, its reasoning was not published until the end of September. This is an indication of the thoroughness and scope of the reasoning. In material terms, the ruling emphasizes the high hurdles of state liability under Swiss law. It is particularly important that the Federal Supreme Court expressly left open the question of the unlawfulness of the Emergency Ordinance because it already failed due to the lack of proof of damage and causality:

5.3: “Whether the requirement of unlawfulness is met can be left open in view of the following considerations, since the plaintiffs are unable to prove damage or a causal connection in connection with the Emergency Ordinance.” and E. 5.6: “Since the criteria of damage, causality and unlawfulness must be met cumulatively (Rec. 4.1 above), there is no need to examine unlawfulness in connection with the adoption of the Emergency Ordinance.” (convenience translation in English from the original decision in German)

Various expert commentaries also underline this interpretation and the signal effect of the case.

3) What should be considered when asserting a claim for damages (in particular state liability) under Swiss law?

According to Art. 3 para. 1 VG, the Swiss Confederation is liable for damage unlawfully caused to third parties by a civil servant in the performance of his/her official duties. “Unlawfulness” presupposes a breach of a protective norm. Pure financial losses are only unlawful if a norm prohibits the conduct and protects the assets of the person concerned. Damage is the unintentional reduction in net assets according to the difference theory; it is an increase in liabilities, reduction in assets or loss of profit and must be quantified and substantiated. In addition, a natural (conditio sine qua non) and adequate causal connection must be proven. The adequate causal link is given if the cause, according to the usual course of events and general life experience, is capable of bringing about a result of the kind that has occurred. In its ruling BGer 2E_1/2024 of May 23, 2025, the Federal Supreme Court reaffirmed the strict, cumulative requirements for damages. The claim was already dismissed here due to a lack of damage and causality, without definitively examining the unlawfulness. This means in particular for future claimants of a claim for damages: Robust quantification and substantiation of the damage as well as careful causality argumentation are crucial.

4) What were the proceedings in New York about and what was decided?

As is well known, the write-down of CS’s AT1 bonds was highly controversial. On June 6, 2024, a group of AT1 creditors filed a civil lawsuit against the Swiss Confederation in the U.S. District Court (SDNY) for around USD 370 million. On September 30, 2025, the court upheld Switzerland’s arguments and confirmed sovereign immunity, meaning that the action was dismissed for lack of jurisdiction. An appeal is possible within 30 days. As the claim was therefore dismissed on formal grounds, there was no substantive examination of the AT1 debt issue in the USA.

5) What do these developments mean for AT1 creditors and the proceedings before the Federal Administrative Court (FAC) in St. Gallen?

Attention is now turning to the FAC. Unlike the SDNY, the FAC is unlikely to deny its jurisdiction. It is likely to examine the appeals and assess substantive issues (including the legality of the FINMA order/Emergency Ordinance). As explained above, the Federal Supreme Court explicitly left the matter of unlawfulness open in its ruling 2E_1/2024 of May 23, 2025, which was recently published. The FAC will therefore have to deal with this. The amounts in dispute total several billion; the economic, social and political implications are far-reaching. Appeals against FAC rulings can be lodged with the Federal Supreme Court; a further appeal is foreseeable. At the same time, reports document the large number of pending AT1 proceedings and complaints of delay due to the complexity and number of parties involved. The FAC has considerable discretion in determining the course of proceedings; it is currently not possible to predict when FAC rulings can be expected.

Conclusion

In Switzerland (BGer 2E_1/2024 of May 23, 2025), state liability remains a steep ramp – without a precise description of the damage and a viable chain of causality, lawsuits fail; the question of the unlawfulness of the Emergency Ordinance remains open. In the USA (SDNY, decision of September 30, 2025), a prominent case formally ended on the issue of sovereign immunity, leaving substantive questions undecided. The focus is now on the Federal Administrative Court in St. Gallen, where the material course will be set: Decisions worth billions in dispute and of considerable market and systemic relevance are pending.

This is precisely where our litigation practice comes in. LINDEMANNLAW combines litigation strategy (damages, causality, protective norms) with proven cross-border experience (CH/EU/US forums, jurisdictions, immunities), regulatory expertise (FINMA rulings, emergency law) and forensic quantification (damage models, event studies). We structure your case in such a way that evidence and legal issues interlock seamlessly – from securities and capital market law to state liability and administrative law.

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Disclaimer: This publication is for general information purposes only and does not constitute legal advice. For legal advice on your specific situation, please contact us directly.